Conde Buys Private Ad Exchange

In light of Madison Avenue's growing fondness for ad exchanges, publishers are being forced to invest in the platforms.

Most recently, Condé Nast this week debuted its own private ad exchange, which it has already made available to a select group of advertisers, including eBay and Macy’s.

Condé Nast said inventory from its entire portfolio of brands will be available upon the exchange’s official introduction by the beginning of 2012.

In addition, price floors will be set with actual CPMs being determined by real-time bidding, according to the tony publisher.

“We’re able to control both pricing and quality which is important to us,” Drew Schutte, EVP and chief integration officer at Condé Nast, said on Tuesday.

Currently, Condé’s display inventory is not available through public ad networks.

The exchange was developed in conjunction with -- and is powered by -- Admeld, which is still waiting for regulatory approval of its $400 million purchase by Google.

Hoping to reduce their reliance on third-party ad exchanges -- which are commonly criticized for driving down CPMs -- publishers have had no choice but forge into the field.

In July, for example, NBC Universal also tapped Admeld to launch its own ad exchange. As the time, NBC said the private exchange would give clients direct access to premium display ad inventory, which could be targeted at scale across the NBC Universal Audience Platform, NBC's own digital ad network.

Still, the amount of online ad dollars being channeled through RTB systems remains small relative to total ad spending. This year, the total will amount to $1.1 billion -- and increase to $2 billion next year -- according to a recent study by IDC analyst Karsten Weide.

Domestically, Condé Nast currently claims 27 Web sites, and more than 40 apps for mobile and tablet devices.

Beginning in 2012, Condé said it plans to invite additional advertisers to participate in the exchange.



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